• Companies are rolling back their diversity policies amid various legal challenges from conservative groups and shareholder activists.
• Conservative groups are fighting back and are likely to continue targeting companies' DEI programs through legal means, urging a shift in focus from these efforts.
• “Shareholders have the right to ask whether a DEI program that made us feel good in the past is now unjust, because its true economic and social impact may lead to some forms of discrimination. It's just replacing it with another form,” said Mark Lebovich, an attorney for the shareholder plaintiffs. These discussions were told to Mr. Semafor.

Companies are quietly reversing their diversity, equity, and inclusion (DEI) practices amid intense legal pressure from conservatives and even their own shareholders, multiple news outlets have reported.

Conservative activists, shareholders and investors are challenging various companies' diversity policies, including Republican attorneys general who are challenging racial hiring quotas alleging illegal discrimination. This includes those who have sent letters. Companies have grown increasingly concerned about DEI after the Supreme Court struck down race-based admissions at universities in June, eliminating certain policies and slowing efforts in anticipation of further legal turmoil. Axios said it reversed course by changing the name. report.

Additionally, a coalition of lawyers and investors has begun exploring ways to leverage corporate law to pressure companies to scale back their DEI policies in response to growing concerns of anti-Semitism on elite college campuses. Semaphore said there is. report on Thursday. (Related: Biden FAA promotes diversity hiring as air traffic control system descends into complete chaos)

DEI is not just immoral, it is illegal because it discriminates based on race, gender, and many other factors.

— Elon Musk (@elonmusk) January 3, 2024

According to Semaphore, the coalition argues that diversity policies can have a negative impact on shareholders, as companies risk losing out on qualified applicants. It also alleges that inconsistent enforcement of workplace regulations influenced by race and other DEI factors may violate federal employment law.

“Shareholders have the right to ask whether a DEI program that made us feel good in the past is now unjust, because its true economic and social impact may lead to some forms of discrimination. It's just replacing it with another form,” said Mark Lebovich, an attorney for the shareholder plaintiffs. These discussions were told to Mr. Semafor.

Companies have started implementing DEI Policies were pushed forward at a rapid pace following the death of George Floyd in May 2020, and approximately $340 billion was spent between then and October 2022 to promote “racial equality.” . according to to the McKinsey Institute for Black Economic Mobility.

Diana Scott, leader of the Conference Board's Human Capital Center, told Axios that “something resembling a quota” is no longer acceptable.

Companies like investment giant Blackstone are focusing on socio-economic diversity instead of racial diversity. according to To Fortune. They're also using terms like “wellbeing and inclusion” instead of DEI, Scott told Axios.

“Companies are really starting to look at other ways to get the job done without saying they're doing the job,” said Cinnamon Clark, co-founder of DEI consulting firm Good Work Sustainability. he told Axios.

Harvard University President Claudine Gay's resignation amid plagiarism allegations has been linked by critics to her lack of qualifications for the job, contributing to the escalating debate over corporate DEI. . according to In the New York Times.

Billionaire Bill Ackman suggested that companies should face backlash against DEI programs. piece The announcement was made to the free press on Wednesday following Gay's resignation.

“In 2024, we will see the growth in admissions (recently deemed illegal by the Supreme Court), business (likely to be illegal, but is done nonetheless), and government (which I am also a person “I believe that meritocracy is anathema to the DEI movement,” Ackman wrote. Even if it is intended to serve the so-called oppressed, it is an inherently racist and illegal movement in its implementation.”

Shareholder activists also sent letters to 25 companies claiming their DEI practices unlawfully discriminate against investors and violate fiduciary duties since 2021, some of which have since made changes. Ta. according to This was reported to Reuters in December. American Airlines, BlackRock, JPMorgan Chase, and Lowe's have edited their DEI language to make it less racially oriented in the wake of conservative lawsuit threats.

Joel Emerson, CEO of consulting firm Paradigm Strategy, disagrees with the characterization of DEI as discriminatory, but acknowledges the debate is gaining momentum in commentary. piece For Thursday's Fortune.

“Their strategy is working, and DEI criticism is becoming more mainstream,” Emerson wrote. “Even those who are likely to support the most common and visible examples of these initiatives (parental leave, fair wages, hiring processes that promote objectivity and reduce bias) are the ones who created these policies. More and more people are starting to wonder if the movement has gone astray.”

American Airlines, Blackstone, Lowe's and JPMorgan Chase did not respond to requests for comment from the Daily Caller News Foundation.

BlackRock declined to comment.

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